Plain English
Glossary
200 terms explained the way you'd hear them at a barbecue. Use this when you bump into a term in our picks you don't know.
Fundamentals
Beta
Beta measures how much a stock's price swings compared to the overall market. If the market goes up 10%, does your stock…
Book Value
Book Value is what a company would theoretically be worth if it sold all its assets and paid off all its debts today. It…
Cash Flow
Cash flow is the actual money moving in and out of a company's bank account. It's different from profit—a company can lo…
Consensus Earnings (Analyst Estimates)
Consensus Earnings (Analyst Estimates) is the average prediction of what a company will earn per share over a specific p…
Debt-to-Equity Ratio
The Debt-to-Equity Ratio measures how much money a company owes compared to how much it's actually worth to shareholders…
Dilution
Dilution happens when a company issues new shares of stock, which spreads ownership across more shares—so your slice of …
Dividend
A dividend is a payment that a company sends to its shareholders—basically, a slice of the company's profits shared with…
Dividend Yield
Dividend Yield is the annual cash payment a company gives you as a shareholder, expressed as a percentage of the stock's…
Earnings Call
An earnings call is a live conference where a company's executives discuss their recent financial results with investors…
EBITDA
EBITDA is a company's earnings before interest, taxes, depreciation, and amortization are subtracted. In simpler terms, …
Enterprise Value (EV)
Enterprise Value is what it would actually cost to buy an entire company, not just its stock. While a company's market c…
EPS (Earnings Per Share)
EPS is a company's total profit divided by the number of shares (ownership pieces) it has outstanding. It tells you how …
EV/EBITDA Ratio
The EV/EBITDA ratio compares a company's total value to its annual earnings before interest, taxes, depreciation, and am…
Follow-on Offering
A follow-on offering is when a company that's already publicly traded issues and sells new shares to raise more cash. Th…
Free Cash Flow (FCF)
Free Cash Flow is the actual cash a company generates after paying for the expenses needed to run its business and maint…
Gross Margin
Gross Margin is the percentage of revenue a company keeps after paying for the direct costs of making its products. Thin…
Gross Profit
Gross Profit is the money a company keeps after paying for the direct costs of making or buying the products it sells. T…
Guidance (Management Outlook)
Guidance is a company's official forecast of its future financial performance, usually shared during earnings calls or p…
Income Statement
An income statement is a financial report that shows how much money a company made and spent over a specific period, end…
Initial Public Offering (IPO)
An Initial Public Offering (IPO) is when a private company sells shares to the public for the first time, becoming a pub…
Market Capitalization (Market Cap)
Market capitalization (or market cap) is the total dollar value of a company's stock. You calculate it by multiplying th…
Mega-cap
A mega-cap stock is a company with a market capitalization (total value of all its shares) of $200 billion or more. You'…
Micro-cap
A micro-cap stock is a company with a market capitalization (total value of all its shares) between roughly $50 million …
Mid-cap
A mid-cap stock is a company with a market capitalization (total value of all its shares) between roughly $2 billion and…
Net Income
Net Income is the profit a company keeps after paying all its bills. It's what's left over after subtracting expenses, t…
Net Margin
Net Margin is the percentage of revenue a company keeps as profit after paying all its expenses. It's calculated by divi…
Operating Profit
Operating Profit is the money a company makes from its core business activities, after paying for the costs to run those…
Payout Ratio
The payout ratio is the percentage of a company's earnings that it returns to shareholders as dividends rather than rein…
Penny Stock
A penny stock is a company's share that trades for less than $5 per share, usually on smaller exchanges rather than majo…
Price-to-Book (P/B)
Price-to-Book (P/B) is a ratio that compares a company's stock price to its book value—basically what the company's asse…
Price-to-Earnings Ratio (P/E)
The Price-to-Earnings Ratio (P/E) is a company's stock price divided by its annual profit per share. It tells you how ma…
Price-to-Sales (P/S)
Price-to-Sales (P/S) is a ratio that divides a company's stock price by its annual revenue per share. It tells you how m…
Revenue
Revenue is the total money a company brings in from selling its products or services, before any expenses are subtracted…
Revenue Growth
Revenue growth is how much a company's total sales increase from one period to the next, usually measured year-over-year…
ROA (Return on Assets)
ROA (Return on Assets) measures how efficiently a company uses its assets to generate profit. It's calculated by dividin…
ROE (Return on Equity)
ROE (Return on Equity) measures how efficiently a company uses your money to generate profits. Specifically, it's the an…
ROIC (Return on Invested Capital)
ROIC measures how efficiently a company uses the money invested in it to generate profits. Think of it as a report card …
Secondary Offering
A secondary offering is when a company sells additional shares of stock to the public after its initial public offering …
Share Issuance (Dilution)
Share issuance (dilution) happens when a company creates and sells new shares of stock, spreading ownership across more …
Small-cap
A small-cap stock is a company with a market capitalization (total value of all its shares) between roughly $300 million…
Stock
A stock is a small piece of ownership in a company. When you buy stock, you're buying a share of that business—kind of l…
Stock Split
A stock split is when a company divides its existing shares into multiple new shares, reducing the price per share while…
Tail Risk
Tail risk is the possibility of an extreme, unexpected market event that falls far outside normal trading patterns—think…
Tangible Book Value
Tangible Book Value is what a company would theoretically be worth if you subtracted all its debts from its physical ass…
Working Capital
Working capital is the money a company has available right now to pay its bills and keep operations running—basically, c…
Technical analysis
52-week High
The 52-week high is the highest price a stock has traded at over the past year. You'll see this number quoted alongside …
52-week Low
The 52-week Low is the lowest price a stock has traded at over the past year. You'll see this number quoted alongside th…
Accumulation/Distribution
Accumulation/Distribution is a technical indicator that measures whether money is flowing into or out of a stock. It com…
ADX (Average Directional Index)
The ADX (Average Directional Index) is a technical indicator that measures how strong a stock's price trend is, regardle…
ATR (Average True Range)
ATR (Average True Range) is a number that tells you how much a stock's price typically bounces around day-to-day. It mea…
Base (Consolidation)
A base, or consolidation, is when a stock's price moves sideways in a tight range for a period of time, rather than tren…
Bear Market
A bear market is when stock prices across the market fall 20% or more from recent highs and stay down for a while. You'l…
Bear Trap
A bear trap is a false signal that a stock's price is falling, which tricks investors into selling, only to watch the pr…
Bollinger Bands
Bollinger Bands are three lines plotted on a stock chart that show you when a price might be unusually high or low. The …
Breakout
A breakout happens when a stock's price moves decisively above or below a level it's been stuck near for a while. Think …
Bull Market
A bull market is a prolonged period when stock prices are rising and investor confidence is high. You'll hear this term …
Bull Trap
A bull trap is a false signal that a stock's price is about to rise, when it's actually about to fall. You'll see the pr…
Candlestick Pattern
A candlestick pattern is a visual formation created by a stock's price movement over a specific time period—usually show…
Chandelier Stop
A Chandelier Stop is a dynamic stop-loss level that moves up as a stock's price rises, helping you lock in gains while p…
Cup and Handle
A Cup and Handle is a chart pattern where a stock's price dips down and recovers (forming a U-shape like a cup), then pu…
Death Cross
A Death Cross happens when a stock's 50-day moving average (the average price over the last 50 days) drops below its 200…
Divergence (Technical)
A divergence occurs when a stock's price moves in one direction while a technical indicator (a mathematical tool that me…
Doji
A doji is a candlestick pattern where a stock's opening and closing prices are nearly identical, creating a cross or plu…
Drawdown
A drawdown is the peak-to-trough decline in a stock's price from its highest point to its lowest point before recovering…
EMA (Exponential Moving Average)
An EMA is a line on a price chart that shows a stock's average price over time, but gives more weight to recent prices. …
Fibonacci Retracement
Fibonacci Retracement is a charting tool that predicts where a stock price might find support (a floor) after it's been …
Gap (Price Gap)
A gap is a jump in a stock's price between one trading day and the next, with no trades happening in between. You'll see…
Golden Cross
A Golden Cross happens when a stock's 50-day moving average (the average price over the last 50 days) crosses above its …
Head and Shoulders
A Head and Shoulders is a chart pattern that looks like a person's head flanked by two shoulders—three peaks where the m…
MACD
MACD stands for Moving Average Convergence Divergence—a tool that tracks whether a stock's momentum is building or fadin…
Momentum
Momentum is the speed and strength of a stock's price movement in a particular direction. Think of it like a rolling bou…
Moving Average
A moving average is the average price of a stock over a set number of recent days, recalculated daily as new prices come…
Oversold / Overbought
Oversold and overbought describe when a stock's price has moved to an extreme—either too low or too high—based on recent…
Pocket Pivot
A Pocket Pivot is a bullish chart pattern where a stock's price pulls back slightly within an uptrend, then breaks above…
Pullback
A pullback is a temporary dip in a stock's price while it's in an overall uptrend. Think of it as a brief pause or step …
Relative Strength (RS Rating)
Relative Strength (RS Rating) measures how a stock's price performance compares to the overall market over a specific pe…
Resistance
Resistance is a price level where a stock has repeatedly struggled to climb higher, acting like a ceiling. You'll hear t…
RSI (Relative Strength Index)
RSI is a momentum indicator that measures how fast a stock's price has been rising or falling on a scale of 0 to 100. It…
SMA (Simple Moving Average)
A Simple Moving Average (SMA) is the average price of a stock over a specific number of recent days. You calculate it by…
Stage 1 (Base)
Stage 1 (Base) is the quiet period when a stock's price moves sideways or slightly up after a significant decline, build…
Stage 2 (Advancing)
Stage 2 (Advancing) is when a stock's price is rising steadily after breaking out from a period of consolidation (sidewa…
Stage 3 (Extended)
Stage 3 (Extended) is a phase in the stock market cycle where a stock continues climbing in price well after its initial…
Stage 4 (Declining)
Stage 4 (Declining) is when a stock's price is falling and the overall trend is downward, typically after it has already…
Stop-loss
A stop-loss is an automatic instruction to sell a stock if its price drops to a specific level you set in advance. Think…
Support
Support is a price level where a stock has repeatedly stopped falling and bounced back up. Think of it as a floor—buyers…
Trailing Stop
A trailing stop is an automatic sell order that moves up whenever your stock price rises, but stays fixed if the price f…
Trend Line
A trend line is a straight line drawn on a price chart connecting two or more points where a stock's price has touched, …
Volume
Volume is the total number of shares traded in a stock during a specific time period, usually a single trading day. You'…
VWAP (Volume Weighted Average Price)
VWAP is the average price a stock traded at throughout the day, weighted by how many shares changed hands at each price …
Weinstein Stage Analysis
Weinstein Stage Analysis is a method for identifying where a stock is in its price cycle by dividing its movement into s…
SEC filings
10-K (Annual Report)
A 10-K is the official annual report that every public company must file with the SEC (Securities and Exchange Commissio…
10-Q (Quarterly Report)
A 10-Q is a quarterly financial report that public companies must file with the SEC (the government agency that oversees…
13D filing (>5% ownership)
A 13D filing is a public document an investor must submit to the SEC when they buy more than 5% of a company's stock. Th…
13F filing
A 13F filing is a quarterly report that large investment managers must submit to the SEC (Securities and Exchange Commis…
13G filing (passive >5% ownership)
A 13G filing is a public document an investor must submit to the SEC when they own more than 5% of a company's stock and…
8-K (Material Event)
An 8-K is a form that publicly traded companies must file with the SEC (Securities and Exchange Commission—the governmen…
ATM offering (at-the-market)
An ATM offering is when a company sells new shares directly to the public at whatever the current market price is, rathe…
Beneficial ownership
Beneficial ownership means actually owning or controlling a stock, even if someone else's name is on the official paperw…
CIK number (Central Index Key)
A CIK number is a unique identification code assigned by the SEC (Securities and Exchange Commission) to every company t…
Cluster buying
Cluster buying is when a company's insiders—like executives or board members—buy shares of their own stock around the sa…
Congress trading (Pelosi tracker)
Congress trading refers to tracking stock trades made by members of Congress and their families. Because lawmakers have …
De-SPAC
De-SPAC is when a special purpose acquisition company (SPAC)—basically a blank-check shell company created to raise mone…
Form 4
Form 4 is a document that insiders—like executives, board members, or major shareholders—must file with the SEC (Securit…
Going concern warning
A going concern warning is a red flag statement auditors include in SEC filings when they doubt a company can stay in bu…
Going private transaction
A going private transaction is when a company that trades publicly on a stock exchange is bought out and removed from pu…
Insider buying
Insider buying is when company executives, board members, or other insiders purchase shares of their own company's stock…
Institutional investor
An institutional investor is a large organization that invests money on behalf of its clients or members—think pension f…
Item 1.01 (entry into material agreement)
Item 1.01 is a section in SEC filings (official documents companies submit to regulators) where they announce major busi…
Item 2.02 (results of operations)
Item 2.02 is a required section in SEC filings (official documents companies submit to regulators) where a company annou…
Lock-up period
A lock-up period is a set timeframe after a company goes public when insiders—like founders, executives, and early inves…
Material weakness
A material weakness is a serious flaw in a company's internal controls—the systems and processes it uses to keep its fin…
NT 10-K (Notification of Late Filing)
An NT 10-K is a form a company files with the SEC when it can't meet the deadline to submit its annual 10-K report (the …
Proxy statement (DEF 14A)
A proxy statement is an official document a company sends to shareholders before their annual meeting, asking them to vo…
Restated financials
Restated financials are corrected versions of a company's financial statements that were previously released with errors…
Reverse merger
A reverse merger is when a private company buys a public company (one whose shares trade on a stock exchange) and takes …
Rule 10b5-1 plan
A Rule 10b5-1 plan is a legal agreement that lets company insiders (like executives) sell their own stock on a predeterm…
S-1 filing (IPO prospectus)
An S-1 filing is the official document a private company submits to the SEC (Securities and Exchange Commission) when it…
S-3 filing (shelf registration)
An S-3 filing is a streamlined way for companies to register securities (stocks or bonds) with the SEC that they can sel…
SEC EDGAR
SEC EDGAR is the free, public database where publicly traded companies file their official financial documents with the …
SEC investigation
An SEC investigation is when the Securities and Exchange Commission (the government agency that oversees stock markets) …
Shelf registration
A shelf registration is a document a company files with the SEC (Securities and Exchange Commission) that allows it to s…
SPAC (Special Purpose Acquisition Company)
A SPAC is a shell company—basically an empty corporate box—created specifically to raise money from investors with the g…
Subsidiary spin-off
A subsidiary spin-off is when a parent company separates one of its divisions into an independent, publicly traded compa…
Tender offer
A tender offer is a public invitation for shareholders to sell their stock at a specific price, usually higher than the …
Whale watching (13F tracking)
Whale watching is tracking what large institutional investors (called "whales") are buying and selling by reading their …
Macro
Commodity Cycle
A commodity cycle is the pattern of price ups and downs that raw materials—like oil, copper, or wheat—go through over ti…
CPI (Consumer Price Index)
The Consumer Price Index (CPI) measures how much the average price of everyday goods and services—like groceries, gas, a…
Credit Spread
A credit spread is an options strategy where you sell an option contract (giving someone the right to buy or sell a stoc…
Deglobalization
Deglobalization is the trend of countries pulling back from international trade and relying more on their own domestic p…
Dot Plot (Fed Projections)
A Dot Plot is a chart where each Federal Reserve official places a dot showing their prediction for future interest rate…
DXY (Dollar Index)
The DXY (Dollar Index) measures the strength of the U.S. dollar compared to a basket of six major foreign currencies—mai…
Fed Pivot
A Fed Pivot is when the Federal Reserve (the U.S. central bank) shifts its interest rate policy from raising rates to cu…
FOMC (Federal Open Market Committee)
The FOMC is the group within the Federal Reserve (America's central bank) that decides interest rate policy. Think of th…
Hard Landing
A hard landing is when an economy slows down so sharply and suddenly that it tips into recession—a period of negative gr…
High-Yield Spread
High-Yield Spread is the extra interest rate that risky bonds pay compared to safe government bonds. Think of it as the …
Industrial Policy (CHIPS, IRA)
Industrial policy is when the government deliberately supports specific industries or sectors through subsidies, tax bre…
Inflation
Inflation is when the prices of everyday things—groceries, gas, rent—go up over time, so your money buys less than it us…
Inverted Yield Curve
An inverted yield curve happens when short-term bonds pay higher interest rates than long-term bonds—the opposite of wha…
ISM Manufacturing PMI
The ISM Manufacturing PMI is a monthly survey that measures whether U.S. factories are expanding or contracting. PMI sta…
Liquidity (Macro Sense)
Liquidity in the macro sense means how easily money and credit flow through the entire economy. Think of it as the amoun…
Market Breadth
Market breadth measures how many stocks are participating in a market move—basically, whether gains or losses are spread…
Nonfarm Payrolls (NFP)
Nonfarm Payrolls (NFP) is a monthly report showing how many jobs the U.S. economy added or lost, excluding farm workers.…
PCE (Personal Consumption Expenditures)
PCE measures the total amount of money Americans spend on goods and services each month. It's one of the most important …
PPI (Producer Price Index)
The Producer Price Index (PPI) measures how much prices are rising or falling at the wholesale level—basically what manu…
Quantitative Easing (QE)
Quantitative Easing (QE) is when a central bank like the Federal Reserve buys large amounts of government bonds and othe…
Quantitative Tightening (QT)
Quantitative Tightening (QT) is when a central bank like the Federal Reserve shrinks its balance sheet by selling bonds …
Recession
A recession is when a country's economy shrinks for at least six months in a row—meaning people and businesses are produ…
Reshoring
Reshoring is when a company moves manufacturing or operations back to its home country after previously outsourcing them…
Risk-on / Risk-off
Risk-on and risk-off describe two opposite investor moods that swing based on economic confidence. When investors feel o…
Sector Rotation
Sector rotation is when investors move their money from one industry group to another based on where they think returns …
Soft Landing
A soft landing is when a central bank (like the Federal Reserve) successfully slows down an overheating economy without …
Supercycle
A supercycle is an unusually long period—often 10+ years—when demand for a commodity or sector stays consistently high, …
Tariff
A tariff is a tax that a government places on goods imported from other countries. When you buy a foreign product, a tar…
VIX (Volatility Index)
The VIX is a number that measures how much investors expect the stock market to bounce around in the near future—basical…
Yield Curve
A yield curve is a graph showing the interest rates (or "yields") that the U.S. government pays on its bonds across diff…
Options & derivatives
At-the-Money (ATM)
At-the-Money (ATM) means an option's strike price (the price you'd pay to buy or sell the stock) is essentially equal to…
Call Option
A call option is a contract that gives you the right—but not the obligation—to buy a stock at a set price by a specific …
Cash-Secured Put
A cash-secured put is an options strategy where you agree to buy 100 shares of a stock at a set price (called the strike…
Covered Call
A covered call is a strategy where you own shares of a stock and simultaneously sell the right for someone else to buy t…
Days to Cover
Days to Cover is a measure of how long it would take short sellers to buy back all the shares they've borrowed and sold.…
Expiry Date
An expiry date is the last day you can exercise (use) an options contract—the deadline to buy or sell the underlying sto…
Futures Contract
A futures contract is an agreement to buy or sell something at a set price on a specific future date. Unlike stocks, whe…
Gamma Squeeze
A gamma squeeze is a rapid price spike that happens when options traders are forced to buy (or sell) a stock all at once…
Implied Volatility (IV)
Implied Volatility (IV) is the market's forecast of how much a stock's price will swing up and down over the next few mo…
In-the-Money (ITM)
In-the-Money (ITM) means an option contract has intrinsic value—it would make money if you exercised it right now. For a…
Iron Condor
An Iron Condor is an options strategy where you simultaneously sell and buy call options (contracts giving the right to …
LEAPS (Long-Dated Options)
LEAPS are options contracts that expire much further in the future than standard options—typically 9 months to 3 years o…
Leverage
Leverage means borrowing money to invest, so you can control a larger position than you could afford outright. You'll en…
Margin (Broker)
Margin is borrowed money your broker lends you to buy stocks, letting you invest more than you actually have in your acc…
Naked Options
A naked option is an options contract (a bet on whether a stock price will go up or down) where the seller doesn't own t…
Open Interest
Open Interest is the total number of active contracts (like options or futures) that haven't been closed or settled yet.…
Options Flow
Options flow is the real-time tracking of how many options contracts (agreements giving the right to buy or sell a stock…
Out-of-the-Money (OTM)
Out-of-the-Money (OTM) describes an option contract that has no intrinsic value right now—meaning it would be worthless …
PDT Rule (Pattern Day Trader)
The PDT Rule is a regulation that requires brokerage accounts with less than $25,000 to limit day trading—buying and sel…
Put Option
A put option is a contract that gives you the right to sell a stock at a set price by a specific date. Think of it as in…
Short Interest
Short interest is the total number of shares that investors have borrowed and sold, betting the stock price will fall. Y…
Short Squeeze
A short squeeze happens when a stock price rises sharply, forcing investors who bet the price would fall (called "shorti…
Strike Price
The strike price is the fixed price at which you can buy or sell a stock through an options contract. Think of it as a l…
Theta Decay
Theta decay is the gradual loss of value in an options contract as its expiration date approaches, even if the stock pri…
Unusual Options Activity (UOA)
Unusual Options Activity (UOA) is when options—contracts that give you the right to buy or sell a stock at a set price—t…
Crypto
Bitcoin Halving
Bitcoin Halving is an automatic event that cuts the reward miners receive for validating transactions in half, roughly e…
Crypto Cycle (4-Year)
The Crypto Cycle (4-Year) is a recurring pattern where Bitcoin and other cryptocurrencies tend to experience major price…
Crypto Treasury Company
A Crypto Treasury Company is a traditional business that holds cryptocurrency (like Bitcoin or Ethereum) on its balance …
Custody (Crypto)
Custody in crypto means a third party holds and secures your digital assets on your behalf, similar to how a bank holds …
DeFi (Decentralized Finance)
DeFi (Decentralized Finance) is a system of financial services—like lending, borrowing, and trading—built on blockchain …
Gas Fees
Gas fees are charges you pay to process transactions on a blockchain—the digital ledger that records cryptocurrency trad…
Hash Rate
Hash rate is the speed at which a computer can solve the complex math puzzles required to validate cryptocurrency transa…
IPO Token / Fair Launch
An IPO Token or Fair Launch is a cryptocurrency project that releases its token to the public all at once, with no speci…
L2 Scaling
L2 Scaling is a technique that speeds up cryptocurrency transactions by processing them off the main blockchain (called …
Layer 2
Layer 2 is a separate system built on top of a blockchain (the underlying ledger that records cryptocurrency transaction…
Memecoin
A memecoin is a cryptocurrency created as a joke or meme, usually inspired by internet humor rather than serious technol…
Mining Difficulty
Mining Difficulty is a measure of how hard it is to solve the mathematical puzzles that validate transactions on a block…
Proof of Stake
Proof of Stake is a method that cryptocurrency networks use to verify transactions and create new coins, where validator…
Proof of Work
Proof of Work is a system that secures cryptocurrency networks by requiring computers to solve difficult math puzzles be…
Smart Contract
A smart contract is a self-executing agreement written in code on a blockchain—a digital ledger that records transaction…
Spot ETF
A Spot ETF is a fund that directly holds actual cryptocurrency (like Bitcoin or Ethereum) and lets you invest in it thro…
Stablecoin
A stablecoin is a cryptocurrency designed to maintain a consistent value, usually by being backed by a real-world asset …
Staking
Staking is when you lock up your cryptocurrency in a blockchain network to help validate transactions and earn rewards i…
Tokenomics
Tokenomics is the study of how a cryptocurrency is designed and distributed—basically the economic rules that govern a d…
Wallet & Cold Storage
A wallet is a digital tool that stores and manages your cryptocurrency (like Bitcoin or Ethereum), similar to how a phys…